Taber Company has just prepared the following comparative annual financial statements for 2010:

Required:
1. For 2010, compute the tests of
(a) Profitability,
(b) Liquidity,
(c) Solvency, and
(d) Market.
Assume that the quoted price of the stock was $23 for 2010. Dividends declared and paid during 2010 were $6,750.
2. Respond to the following for 2010:
a. Compute the percentage changes in sales, income before extraordinary items, net income, cash, inventory, and debt.
b. What appears to be the pretax interest rate on the note payable?
3. Identify at least two problems facing the company that are suggested by your responses to requirements 1 and2.

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TABER COMPANY Comparative Income Statement For the Years Ended December 31, 2010, and 2009 2010 2009 Sales revenue (one-half on credit) Cost of goods sold Gross profit Expenses (including $4,000 interest $110,000 $99,000 48,000 51,000 52.000 S 58,000 40,000 S 18.000 37,000 expense each year) Pretax income Income tax on operations (30%) Income before extraordinary items Extraordinary loss $14,000 4.200 5.400 S 12.600 1.400 9,800 Less income tax saved 600 $3,000 900 gain Applicable income tax 2,100 Net income S 11.200 $11,900 TABER COMPANY Comparative Balance Sheet At December 31, 2010, and 2009 2010 2009 Assets Cash Accounts receivable (net; terms 1/10, n/30) 49,500 37,000 25,000 95.000 S 18,000 32.000 38,000 05,000 $193,000 Operational assets (net) Total assets $206 500 Liabilities Accounts payable Income taxes payable Note payable, long-term Stockholders' equity Capital stock (par $10) Retained earnings Total liabilities and stockholders equity $ 35,000 500 40,000 42,000 1.000 40,000 90,000 33.500 206500 90,000 27,500 $193.000